ARDC and the Father of
Venture Capital

In 1946 Doriot returned to Harvard and the same year he founded
American
Research and Development Corporation (ARDC), one of the first
two venture
capital firms along with Ralph Flanders and Karl
Compton (former president of MIT), to encourage private sector
investments in businesses run by soldiers who were returning from
World War II. ARDC's significance was primarily that it was the
first institutional private equity investment firm that accepted
money from sources other than wealthy families although it had
several notable investment successes as well.[1]

ARDC is credited with the first major venture capital success
story when its 1957 investment of $70,000 in Digital Equipment
Corporation (DEC) would be valued at over $355 million after the
company's initial public offering in 1968 (representing a return of
over 500 times on its investment and an annualized rate of return of
101%).[2] Until
his death, Doriot remained friends with Ken Olsen, Digital's founder.

Later
years

ARDC continued investing until 1971 with the retirement of
Doriot. In 1972, Doriot merged ARDC with Textron after investing in over 150 companies.
For his role in the founding of ARDC Doriot is often referred to as
the "father of venture capitalism".[3][4]